Report - Public Procurement in Scotland: The case for scrutiny, accountability and transparency

Report calls for changes to Freedom of Information to increase openness and increased accountability from parliamentary committees of procurement, among other measures

THERE has been a “loss in public rights” from the approach the Scottish Government has pursued in procurement and the building of infrastructure, a new Common Weal report by economist Margaret Cuthbert has argued, calling for wide-ranging changes to ensure accountability and transparency.

The report, ‘Public Procurement in Scotland: the case for scrutiny, accountability and transparency’, can be read in full here.

It draws on 15 years of research into procurement by Jim and Margaret Cuthbert, and is a synthesis of much of that substantial evidence base.

Cuthbert finds that government has signed contracts with the private sector “binding them from not releasing information about the contract.”

“This secrecy continues to this day,” she adds.

Freedom of Information requests are regularly rejected or with crucial information dubbed out, making it next to impossible for the public to hold government and the contractor account for performance and costs. Records become ‘historical’ (therefore open to public view) 15 years after they are produced; too late to do anything about it.

“There is nothing that can be done by the public if it is found 15 years after the event that a local authority, the prison service, the NHS or central government, entered a contract which was overly costly and caused harm to various aspects of the local community,” Cuthbert states.

Unaccountable public bodies

The report also looks at the rise of Non-Departmental Public Bodies (NDPB’s) in Scotland and there increasingly large budgets they manage. A major example of this is Scottish Futures Trust (SFT), which is registered as a private company, and Cuthbert believes it could be vulnerable to a “sell-off”.

“As SFT is a private company can its shareholders, who are currently the government, sell their shares to bodies outside Scotland? If so, is this in the interest of the Scottish public given that the SFT has become a major force in health, education, prisons, etc., and given that it is building up a large asset portfolio? … The SFT is itself building a considerable portfolio of assets, for example, through the Hub programme. Scotland has already seen, through the 1980s and 1990s, the sell-off of major public assets. The structure of the SFT would seem to make it even more likely that such a thing will happen again and be even more of a problem to the public than the earlier sell-offs.”

Cuthbert questions why NDPB’s are not subject to much more rigorous and structured forms of parliamentary scrutiny.

Further questions

Further questions Cuthbert raises include why there is no scrutiny of the fact that local businesses attain very few public procurement contracts (meaning profits from procurement almost always leave Scotland) and why no Whole of Government Accounts are produced by the Scottish Government for proper fiscal planning despite being repeatedly called for from Audit bodes.

Recommendations

The report makes five recommendations for reform to ensure scrutiny, accountability and transparency.

“1) More highly qualified staff with grounding in economics, statistics, and finance in the public sector at senior positions, with their input being treated as a solid base for policy decisions.

2) A stoppage to the bundling of projects into very large projects where the public sector is unlikely to be able to follow the path of the financing and of the methods being used.

3) Much more openness in Freedom of Information to allow for scrutiny of contracts, leading to the ability for changes to be made where the contract is found to be against the interests of the public or too much of a money maker for the consortium.

4) Far more clout being given to Parliamentary Committees to hold Government to account and to hold NDPBs to account. A stronger Parliament that holds a government to account when a Committee has shown that change is needed.

5) The publication of Whole of Government Accounts. These would bring to light the level of debt, currently out of sight, that is being incurred.”

Comment

Commenting on the report, Robin Mcalpine, Common Weal director, stated:

“The Scottish public has been told that we have something close to the optimal system for funding and building public infrastructure in Scotland. So it is surely a legitimate question to ask why so much effort is put into hiding all the information which would allow an independent assessment of whether this is true or not.

“Between willy-nilly use of commercial confidentiality clauses to hide the details of how public money is being spent, to the complex structures of private companies delivering a lot of the management of this work being exempt from Freedom of Information, the public will only learn the truth 15 years after the deals are done.

“If this is meant to generate public trust that public money is being used well and fairly, it’s a strange way to go about it.”

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